CLEVELAND, Ohio - Local investors are planning a five-story condominium building in Cleveland's Little Italy neighborhood, anticipating demand from downsizing suburbanites who don't necessarily want to jump on the rental bandwagon.

Bluewater Capital Partners, LLC, has signed a deal to buy a low-slung industrial building at 2044 Random Road, northwest of the red brick Murray Hill School complex. On Thursday, the Cleveland Landmarks Commission approved Bluewater's request to demolish the older building and replace it with a 26-unit condo project that might open in late spring of 2018.

Pricing could start at $475,000 and top out at $765,000, with most of the condos falling in the mid-$500,000s to mid-$600,000s. Units will range from 2,100 to 3,000 square feet.

"We're really cautious about what we do," said Russell Lamb, a principal at Bluewater. "And we're looking for, I call them, centers of gravity in Cleveland. University Circle clearly is a center of gravity, and Little Italy is a great neighborhood."

A site plan shows the proposed layout of the Quattro condominium building, across from the Murray Hill School complex.Cleveland Landmarks Commission

Eighteen of the 19 homes at Bluewater's last project, University Place Townhomes on East 118th Street in University Circle, have been sold. The last house is under contract, roughly two years after the first one changed hands. To the surprise of Lamb and his partners, who are executives at Allegro Real Estate Brokers & Advisors in Cleveland, the largest and costliest homes sold first.

"We turned a lot of people away at the townhomes who were looking to move, maybe, from higher-tax suburbs into the city," Lamb said. "But our units were just a little too small. If you're moving from a 4,000-square-foot house in Cleveland Heights into the city ... it's hard to squeeze into a 1,700-square-foot house."

Construction of the $13 million condo project, called Quattro, could start in the spring. Bluewater expects to take advantage of 15 years of residential property-tax abatement, which Cleveland routinely offers for new homes that meet certain green-building standards. Buyers who work at nearby hospitals and other institutions will be eligible for the Greater Circle Living program, which offers forgivable loans to offset down payments, closing costs or both.

The Landmarks Commission reviewed the condo proposal because the Quattro site is located in a historic district. But the existing single-story building, a woodworking shop, is not historically significant. The demolition request wasn't controversial. Members asked Bluewater to fine-tune aspects of the new building's design and return to discuss lighting and landscaping.

"It's nice to be able to come to you all and wholeheartedly support a project," Daniel DeAngelo, from the city's housing development office, told the commission. "I don't want to be too effusive, but I want to commend the architect and the developer for doing a project that's very compatible with the neighborhood."

In particular, he applauded Bluewater's decision to put townhouse-style units on the first floor of the building, masking the 52-space parking garage tucked inside and providing a better, more pedestrian-friendly transition between the project and the street.

Ray Kristosik, executive director of the nonprofit Little Italy Redevelopment Corp., said a neighborhood design-review committee was pleased to see a proposal for for-sale housing. The group's concerns were about the building's color scheme. Some participants thought there was too much going on. They asked the developer and architect to simplify the building's look.

"This is in a very prominent spot in the neighborhood," Kristosik said. "It's going to be very visible not only from Random but also from Mayfield Road on the other side."

At three-quarters of an acre, the property is flanked by Tony Brush Park and the Singer Steel building, a skeletal, warehouse-like structure that was transformed into a parking garage several years ago. The condos will require zoning variances related to overall square footage and the building's proximity to the rear property line, which abuts a community garden.

Bluewater needs to line up buyers for a quarter of the units before construction starts, Lamb said. Financing a condo project still is challenging. Conversations with lenders take longer than discussions about apartments. But the developer didn't believe rental was the way to go.

"We studied this site for apartments," Lamb said. "I think the apartment market is frothy, personally. And I think there continues to be no supply of new, for-sale development if you want modern living in a historic setting. ... I think this market's not being met."